9/11 Victims’ Claims to Afghanistan’s Foreign Exchange Reserve

Afghanistan’s foreign exchange reserve has drawn considerable interest of late. According to recent reports, Da Afghanistan Bank (DAB), the State’s central bank, holds around USD 10 billion in the form of US treasury bonds, gold offshore and other investments. Given that most of the funds are held in the United States Federal Reserve and denominated in foreign currency, they were not affected by the collapse of the afghani. Since August, the afghani has lost more than 25% of its value against the dollar, making it the “the world’s worst-performing currencies over the past six months”.

Representatives of the Taliban government are, unsurprisingly, claiming they should have access to the funds. As the situation on the ground deteriorates at an alarming pace, with the country on the brink of famine, there have been calls for the financial reserve to be made accessible to the Afghan people and put to humanitarian purposes. Meanwhile, in November the New York Times reported that lawyers for victims of the 9/11 terrorist attacks had gone to court to try and attach most, if not all, of Afghanistan’s foreign exchange reserve.  

This latest attempt is based on default judgments obtained against the Taliban and on the fact that the latter is now claiming “control over, and ownership of” the State’s assets. While there is no questioning the victims’ right to compensation, whether funds belonging to the State of Afghanistan can be attached to satisfy a judgment rendered against the Taliban is another question altogether and one that deserves closer scrutiny.

Judgments entered against the Taliban

Twenty years ago, families and legal representatives of victims of the 9/11 terrorist attacks initiated civil proceedings against various State and non-State entities. In 2012, the U.S. District Court for the Southern District of New York awarded the Havlish group of plaintiffs – the same group who applied to attach the DAB’s assets – USD 6 billion in damages (1.3 billion in compensatory damages and 4.7 billion in punitive damages). Enforcement was bound to be difficult and, when rendered the judgment was seen as largely symbolic.

The State of Afghanistan was not named as a defendant, only the Taliban were. It would not have been possible for a court to assert jurisdiction over Afghanistan. The Foreign Sovereign Immunities Act (“FSIA”) does provide limitations on sovereign immunity for “State Sponsor of Terrorism” (SST), but Afghanistan never was listed as such (currently only Cuba, Iran, Syria and North Korea are on the list). The only state against which the Havlish judgment was rendered is the Islamic Republic of Iran. Somewhat confusingly, however, the judgment refers to “The Taliban, a/k/a the Islamic Emirate of Afghanistan”. Still it makes clear that the Taliban are among the “non-sovereign defendants”.

In any event, whether the State of Afghanistan could have been held legally responsible for attacks committed by Al Qaeda is very much uncertain. We know that under the “Bush doctrine” the United States ascribed acts of Al Qaeda to the States that harboured them. However, the case for attribution of Al Qaeda’s acts to Afghanistan, whether under article 8 or 11 of the ILC Articles, can hardly be made without expanding existing rules of attribution.

Attachment of Afghanistan’s assets in 2021

In the ten years that followed the judgment, no attempts seem to have been made to seize Afghanistan’s assets. The Havlish plaintiffs focussed their efforts on Iran and initiated proceedings in Luxembourg, England and Italy. Interest has accrued and the sum now claimed is in excess of USD 7 billion.

Their strategy shifted in 2021. Amid the chaotic withdrawal of U.S. troops, the Taliban made quick progress and on August 15, they marched on Kabul. On 27 August 2021, the Havlish plaintiffs asked that a judge direct a U.S. marshal to serve the Federal Reserve of New York with a writ of execution to attach most of the funds deposited by Afghanistan, which they obtained.

The US District court judgment commanding the U.S. Marshall to serve the writ refers to property of “the Islamic Emirate of Afghanistan, which is the Taliban”. The writ itself recalls that, in August, the Taliban “declared itself the government of Afghanistan and changed the name of the country to the Islamic Emirate of Afghanistan, which is also the name of the Taliban”.

The rest of the reasoning is as circular, if a little bit more detailed:

“The Taliban as the Islamic Emirate of Afghanistan now asserts control over the country formerly known as Afghanistan, previously governed by the Islamic Republic of Afghanistan, and has assumed governance of the people within the jurisdictional borders of Afghanistan […] The Taliban, as the Islamic Emirate of Afghanistan, also claims ownership of, and control over, all property, property interests, and all rights belonging to the former government of the Islamic Republic of Afghanistan, including all assets belonging to the central bank of Afghanistan”.

It concludes:

“As a result, the judgment entered against the Taliban which is now the Islamic Emirate of Afghanistan can now be enforced against any and all assets belonging to the government of Afghanistan, including any assets held at the Federal Reserve Bank”.

The syllogism seems to be the following: (1) a judgment was entered against the Taliban (2) the Taliban proclaims the State’s assets are theirs, (3) hence the judgment can be enforced against the State’s assets. The logic is obviously flawed. The State’s assets do not become the Taliban’s solely because they became the government. Nor do State assets “belong” to their respective government, in any case.

State responsibility for the acts of a successful insurrectional movement

The language used in the writ is reminiscent of the logic behind article 10(1) of the ILC Articles. The writ stops short of attributing responsibility to the State, but there are references to the Taliban overtaking the previous regime and to the State having to account for claims levelled against them.

While there is a presumption of non-attribution of acts of insurgents to the State, it is rebutted where the insurgents are successful in creating a new government. Article 10 of the ILC Articles provides that “The conduct of an insurrectional movement which becomes the new Government of a State shall be considered an act of that State under international law”. Whether the rule is based on the structural continuity between the insurgents and the new government, or on the need to fill an accountability gap, or, more controversially, on the crystallization of a national will, it has found strong support in the caselaw.

Under article 10, one key requirement is the existence of a “real and substantial” continuity between the movement and the new government (Commentary on Article 10, para. 7). On the facts of the present case, this appears to be met.

Whether or not the Taliban enjoy government status under international law, however, is open to debate. It is an objective issue that is not dependent on recognition (although that may be a relevant factor). The Taliban appear to enjoy effective control of the territory, a necessary condition but one that may not be sufficient. As was well explained in another post: contemporary practice tends to give precedence to “a constitutionally-valid claim to power over a political entity in effective control”. Of course, in the present case, the existence of a constitutional valid claim to power, that of Amrullah Saleh, has not received a lot of support. Besides, for article 10 to apply, “considerations of legitimacy or illegitimacy of [the government’s] origin” are said to be inapposite (Commentary on Article 10, para. 11) and have been set-aside in the past.

As Dumberry points out, one grey area is how far back in time one could go when attributing acts of the insurgents to the State: is it from the moment the rebel group was created, when the insurgents were sufficiently organized or when they enjoyed sufficient control over the territory? (See Dumberry, p. 112). In the case of the Taliban the issue is further complicated by the fact that they were still the de facto government when the 9/11 attacks occurred. Following the US bombing campaign, they were driven away and later reappeared in the form of a widespread insurgency. From a temporal perspective it is not clear at all that the mechanism of Article 10 would apply to attribute to the State, the acts committed in 2001. If any, the relevant rule of attribution would have been Article 4. But then that would mean that the Taliban’s conduct was attributable to the State all along and well before 2021, which does not accord well with the plaintiffs’ failure to enforce against the State for the past ten years.

In any event, it is questionable whether rules of attribution could support the attachment of the State’s assets. Rules of attribution are secondary rules of responsibility “formulated for this particular purpose, and not for other purposes for which it may be necessary to define the State or its Government” (ILC Articles Commentary, Chapter 2, para. 5). The 2012 US judgment gave rise to a claim to money that can be enforced against the Taliban – not against the State. Rules of attribution do not need to come into play to explain this basic distinction, however convenient it may be to disregard it.

As a side note and to the extent that the State was found liable and international law rules on reparation were given attention, reparation should be limited. If ever a case against crippling compensation could be made, it is here.

Conclusion and next steps

In addition to the difficulties outlined above, the plaintiffs may also face obstacles based on state immunity from enforcement. None of the FSIA’s exceptions to attachment immunity may be relied on. While the Justice Against Sponsors of Terrorism Act (“JASTA”), that became law in 2016, considerably widened the scope of exceptions to sovereign immunity from jurisdiction, it did not affect the previous regime on immunity from attachment. Accordingly, JASTA would apparently not allow for enforcement against the State’s assets.

The United States has framed exceptions to the principle of sovereign immunity to fit political purposes, in ways that have said to breach international law and given rise to well-known disputes (see previous posts here and here). Attempts to seize the State of Afghanistan’s assets on the basis of the Taliban now being the de facto government and having access to state assets, should be resisted. Not only would these have devastating consequences on the population’s means of survival, but they lack a legal basis.

In December the US government requested additional time, until January 28, 2022, to file a Statement of Interest regarding the writs of execution served by the Havlish plaintiffs on the DAB’s accounts. Other group of 9/11 victims plaintiffs have sought to intervene and indicated that they would be applying for a share of the funds. Counsel for one group of plaintiffs already indicated they thought “The funds should go to all of the victims, not a select few”. It is not at all clear whether the Taliban were named as defendants in all these proceedings. Negotiations are allegedly taking place between lawyers for the Havlish plaintiffs and the Justice Department.  The former is said to have “proposed a deal to divide the $7 billion among three categories of recipients if the Biden administration backs them in court”.